CORAM
BELLO, JUSTICE SUPREME COURT
UWAIS, JUSTICE SUPREME COURT
COKER,JUSTICE SUPREME COURT
KARIBI-WHYTE, JUSTICE SUPREME COURT
KAWU, JUSTICE SUPREME COURT
OPUTA,JUSTICE SUPREME COURT
PARTIES
NASARALAI ENTERPRISES LTD
APPELLANTS
ARAB BANK NIGERIA LTD
RESPONDENTS
AREA(S) OF LAW
BREACH OF CONTRACT OR NEGLIGENCE
SUMMARY OF FACTS
The dispute between the parties in this appeal had its root embedded in the use of a letter of credit issued to facilitate international trade for the purchase of 100,000 bags of rice at the price of (US) $2,200,000 by a buyer in Nigeria from a seller in Thailand. Relying on the documents the Bank of Tokyo paid the purchase price to the seller and advised the Respondent of the payment. It also remitted the documents to the Respondent. The Managing Director of Appellant accepted the documents on behalf of the Appellant and authorized the Respondent to debit the purchase price to the Appellant’s account. Accordingly, the Respondent debited the Appellant’s account in partial satisfaction of the purchase price. Most of the rice was destroyed and there is no evidence that any bag arrived in Nigeria. Alhaji Popoola testified that not a bag had been delivered to the Appellant. The Appellant as plaintiff caused a writ of summons to be issued against the Respondent /defendant by the High Court claiming special and general damages for breach of contract and negligence. Judgment was entered for the Appellant accordingly. The Respondent was not satisfied with the decision of the trial court and so appealed to the Court of Appeal. The Court of Appeal allowed the appeal and set aside the decision of the trial court for lack of jurisdiction and on the issue of estoppel. The appellant then appealed to the Supreme Court.
HELD
The appeal was dismissed. The decision of the Court of Appeal was affirmed.
ISSUES
1. The Court of Appeal erred in its assessment of the evidence to reverse the finding of fact.
2. That the Respondent failed to incorporate in the letter of credit, as instructed by the Appellant non-user of a ship more than 15 years old.
3. The learned trial judges of the Court of Appeal erred in law in holding that no reason was given by the trial judge for holding that the Bank of Tokyo received all the documents listed in Ex.G7 on the same date, and that even if it did, it was not obliged to consider the Hatch Report as this was not one of the documents listed in the letter of credit.
RATIONES DECIDENDI
BASIC TENOR OF THE LAW AND PRACTICE RELATING TO COMMERCIAL LETTER OF CREDIT
“The basic tenor of the taw and practice relating to commercial letter of credit is that parties deal in documents not in goods or ships.” Per BELLO, J.S.C.
RIGHT OF PARTIES TO REJECT DOCUMENTS WHICH DO NOT COMPLY WITH THE TERMS AND CONDITIONS OF THE LETTER OF CREDIT
“Subject to the law relating to acceptance, estoppel and waiver, all the parties, i.e, the buyer, the issuing bank and the correspondent or confirming bank, have the right to reject documents which do not comply with the terms and conditions of the letter of credit and in the case of a buyer if the documents do not also comply with his mandate to the issuing bank for the opening of the letter of credit shall amplify the law relating to the right to reject.” Per BELLO, J.S.C.
DUTY OF BANK TO COMPLY WITH THE INSTRUCTIONS OF ITS CUSTOMER IN OPENING A LETTER OF CREDIT
“The law is well settled that in opening a letter of credit, a bank has a duty to comply with the instructions of its customer.” Per BELLO, J.S.C.
CASES CITED
J.H.Rayner & Co.Ltd., and the Oilseeds Trading Co. Ltd. v. Hambros Bank Ltd. (1943) Lloyds Rep. 10 (C.A.)
Bank Melli Iran v. Barclays Dominion,Coionial & Overseas (1951) 2 Llyod’s Rep 367
Panchaud Freres S.A. v. Et. General Grain Co. (1970) 1 Llyod’s Rep. 53 at 57.1
STATUTES REFERRED TO
Not Available